US Foreign Policy: Misjudging Kim Jong-un

March 16, 2018

US Foreign Policy: Misjudging Kim Jong-un

by John C Hulsman*

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If US President Donald Trump and his advisers continue to assume that traditional deterrence does not apply to North Korea, they are likely to lose the latest geopolitical chess match. History shows that those who mistake their political or military adversaries for lunatics are usually disastrously wrong.

MILAN – Throughout history, political observers have found decision-makers who are deemed “crazy” the most difficult to assess. In fact, the problem is rarely one of psychopathology. Usually, the label merely indicates behavior that is different from what conventional analysts were expecting.

This was surely true of the twelfth-century Syrian religious leader Rashid al-Din Sinan. During the Third Crusade, the supposedly mad “Old Man of the Mountain,” as he was known, succeeded in disrupting a Crusader advance on Jerusalem by directing his followers to carry out targeted assassinations. After carrying out their orders, the assassins often stayed put and awaited capture in full view of the local populace, to ensure that their leader received proper credit for the act.

At the time, such actions were incomprehensible to the Western mind. Westerners took to calling the Old Man’s followers hashashin, or users of hashish, because they regarded intoxication as the only possible explanation for such “senseless” disregard for one’s own physical wellbeing. But the hashashin were not drug users on the whole. And, more to the point, they were successful: their eventual assassination of Conrad of Montferrat led directly to the political collapse of the Crusader coalition and the defeat of Richard the Lionheart of England. As Polonius says of Hamlet, there was method to the Old Man’s madness.

Today, the problem of analyzing supposedly lunatic leaders has reappeared with the North Korean nuclear crisis. Whether North Korean dictator Kim Jong-un is mad is not merely an academic question; it is the heart of the matter.

US President Donald Trump’s administration has stated unequivocally that it will not tolerate a North Korean capability to threaten the mainland United States with nuclear weapons. According to Trump’s national security adviser, H.R. McMaster, the administration’s position reflects its belief that Kim is crazy, and that “classical deterrence theory” thus does not apply.

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White House Chief of Staff John Kelly

During the Cold War, US President Dwight Eisenhower reasoned that even if Stalin (and later Mao) was homicidal, he was also rational, and did not wish to perish in a US counter-strike. The logic of “mutually assured destruction” that underlay nuclear deterrence worked.

If, however, the leader of a nuclear-armed state is a lunatic who is indifferent to his physical safety and that of those around him, the entire deterrence strategy falls apart. If Kim is insane, the only option is to take him out before his suicidal regime can kill millions of people.

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“Kim Jong-un’s dramatic overture to hold a summit with Trump by May hardly seems to fit the “madman” narrative. In fact, it looks like the act of someone who knows exactly what he is doing.”–John C Hulsman

But is Kim truly crazy, or does he simply have a worldview that discomfits Western analysts? His dramatic overture to hold a summit with Trump by May hardly seems to fit the “madman” narrative. In fact, it looks like the act of someone who knows exactly what he is doing.

Consider three strategic considerations that Kim could be weighing. First, his regime might be planning to offer concessions that it has no intention of fulfilling. After all, an earlier nuclear deal that the US brokered with his father, Kim Jong-il, was derailed by duplicity. In 2002, the US discovered that the regime was secretly enriching weapons-grade uranium in direct violation of its earlier pledge.

In fact, North Korea has demonstrated time and again that it doesn’t play by the rules. It enters into negotiations to extract concessions such as food aid, and then returns to its objectionable activities, thus starting the entire Sisyphean cycle again. There is no reason to think that this time will be different. But the regime’s deviousness should not be mistaken for irrationality or madness. Simply by expressing his openness to talks, Kim has already won some of the political legitimacy he craves.

Second, rather than being a lunatic, Kim seems mindful of recent history. Whereas Saddam Hussein in Iraq and Muammar el-Qaddafi in Libya paid the ultimate price for giving up their nuclear programs, Kim has advanced his regime’s nuclear capabilities and is now publicly treated as a near-equal by the most powerful man on the planet. The Kim regime has always sought such vindication above everything else.

A third and final consideration is that North Korea is playing for time. Though it has agreed to halt nuclear and missile tests in the run-up to the summit, it could be using the intervening months to develop related technologies. For example, it still needs to perfect an atmospheric re-entry mechanism to make its intercontinental ballistic missiles capable of striking the US mainland reliably and accurately. Moreover, as long as the summit is in play, North Korea need not fear a US military strike. That is a perfectly rational and sensible prize for Kim to pursue.

All told, North Korea’s “opening” will most likely amount to much less than meets the eye. But one can still glean valuable strategic insights from Kim’s diplomatic gambit. North Korean thinking reflects cunning, to be sure; but it also betrays the regime’s will to survive, and its desire to master the current situation. This suggests that Kim is not “crazy” after all, and that conventional deterrence will still work, as it has since 1945.

That is good news for everyone, but particularly for the Trump administration, given that it will almost certainly fail to secure any meaningful concessions from North Korea in the upcoming talks.

*John C. Hulsman is President and Co-Founder of John C. Hulsman Enterprises, a global political risk consulting firm, and the author of To Dare More Boldly (Princeton University Press, 2018).

Foreign Policy: US’ New Military Strategy (Quad) to contain China

March 12, 2018

Foreign Policy: US’ New Military Strategy (Quad) to contain China

By: Salman Rafi Sheikh

Over recent months, the ‘Quad,’ the nickname for a regional mechanism comprising the US, Australia, Japan and India and ostensibly established as a security forum by Japanese Prime Minister Shinzo Abe almost a decade ago, has increasingly evolved into a central tenet of the US’s new military strategy vis-à-vis China.

Using words taken from the US National Security Strategy document, China is regarded as a “revisionist power” that must be contained and whose increasing influence counterbalanced through alternative economic and military means.

The Quad largely went dormant following the withdrawal of Australia during the tenure of the dovish Kevin Rudd as Prime Minister. But Abe, Australian and Indian Premiers Malcolm Turnbull and Narendra Modi and US President Donald Trump agreed in Manila last November to revive it. China – and the rest of the world – were delivered a bristling message on the sidelines of the ASSEAN and East Asia summits in Manila last November.

It was a message that was reinforced two weeks ago at a summit in New Delhi in which naval chiefs of the four countries, known formally as the Quadrilateral Security Dialogue, shared the stage to grapple with what regional news reports termed as “Chinese unilateralism,” which needs to be countered through reviving the Quad, which is seen in China as nothing less than an “Asian NATO.”

Image result for Admiral Harry HarrisCommander of US Armed Forces in Asia, Admiral Harry Harris, has been nominated to the position of US Ambassador to Australia.


Representative of the member countries expressed their views, but the reported star of the show was Admiral Harry Harris, the Commander of the US Pacific Command in Hawaii and the next US Ambassador to Australia. Targeting China in perhaps the most explicit terms, Harris said: “The reality is that China is a disruptive transitional force in the Indo-Pacific, they are the owner of the trust deficit in the region,” adding that China’s intent is not only to dominate singlehandedly the South China Sea but also to rival if not match the American military power and force it out of the region.

Harris’s words were corroborated by the Australian Navy Chief who called upon the members to take concrete action against the PLA’s Navy.

A revival is, therefore, clearly in place here. But there are different objectives working behind it. For the US, the primary motivation is that it wants to maintain its erstwhile position in the region as the guarantor of security, a position that has been considerably damaged by the Trump Aadministration’s own scrapping the Trans-Pacific Partnership (TPP).

While TPP itself could have been an effective alternative to China’s Belt & Road Initiative (BRI), the Quad revival is taking place as a military strategy signifying that the US wants to keep its focus on the military aspects of its engagement with the region, and that it aims to maintain economic relations on bilateral terms, as emphasized on a number of occasions by the Trump administration.

For instance, Japan has its own concerns, which are not just militaristic. While the US seems intent on keeping the Quad a security arrangement, a successor-alternative to the “Asia Pivot” and rebranding it as a pivot to the Indo-Pacific, Japan’s aims are more diverse.

Tokyo has already pledged US$200 billion as an alternative to China’s BRI and promised to invest this money into building infrastructure around the world. Japan, using the Asian Development Bank as the primary vehicle of investment and loans, seems to be intent upon countering China and its ambitious Asia Infrastructure Investment Bank (AIIB), but nonetheless remains interested in maintaining a sound economic relationship with China.

This is purely economic competition, not simply containment of a “revisionist power.” China is already Japan’s second-biggest export market and Australia’s No. 1 export market as well. Wouldn’t containing China then mean a potential economic loss? And wouldn’t a military containment of China establish a conflict of interests between the Quad members? It’s hard to deny.

As for Australia, it was only a few months ago when Canberra signed a Memorandum of Understanding with China, regarding BRI, signaling Australia’s increasing accommodation with China’s economic overtures.

Then there is India, which had a tough last year with China due to the border standoff between Indian and Chinese armed forces over Chinese construction of a road on the Bhutan border. There have been other provocations including a contest for influence in the Maldives.  But in fact their bilateral relations have eased and both countries have increasingly started to show sensitivity to each other’s interests. While this easing doesn’t necessarily imply a major transformation, it does indicate that India is not simply following in the US’s footsteps leading to military containment of China.

 As has been reported, the Modi government recently took the extraordinary step of preventing its officials from attending functions marking the 60th anniversary of the Dalai Lama’s exile in India. Clearly, India was showing a lot of sensitivity to the understanding that had was reached between both countries during the recent visit to China by India’s Foreign Secretary, Vijay Gokhale. As such, while the official Indian readout on Gokhale’s discussions in Beijing included aspects of bi-lateral interests, the catchwords were “mutual respect and sensitivity to each other’s concerns and aspirations.”

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Therefore, the US campaign to rope India into its new containment strategy has its limitations. For one thing, while all the Quad member countries except the US want to continue to use the US presence as a counterweight to China, they are more interested in balancing their relations with China than simply taking part in a strategy that stands little chance of success. For another, China’s rapidly increasing economic and military presence in Asia, although it has its own pitfalls, is likely to inhibit other, lesser countries from supporting the Quad.

On the contrary, a military revival of the Quad with its emphasis on countering China might divide the region further and take it towards a highly tense, zero-sum competition. India’s revised China strategy indicates that it would continue to prefer to follow an independent policy vis-à-vis China rather than toe the US line and end up facing stand-offs in the Himalayas.

China, sensing this buildup, has already responded by increasing its defense spending, calling the increase a necessary ‘element of peace,’ thus proving that the adversarial and aggressive depiction of China would do little to develop non-aggressive and non-military relations between the US and China on the one hand, and between China and other regional countries, particularly the Quad members, on the other. Therefore, from the very beginning of its nascent revival, the Quad seems to have been set on a self-defeating path.

Salman Rafi Sheikh is a Pakistani academic and regular contributor to Asia Sentinel

Key State Department Man on North Korea and Former US Ambassador to Malaysia, Joseph Yun leaves the Trump Administration’s Foreign Policy Team

February 27, 2018

Key State Department Man on North Korea and Former US Ambassador to Malaysia, Joseph Yun leaves the Trump Administration’s Foreign Policy Team

SEOUL (WASHINGTON POST) – The State Department’s point-man on North Korea, Joseph Yun, will leave his post on Friday (March 2), even as there are glimmers of hope that Pyongyang might finally be willing to sit down for talks with Washington.

Yun, who is 63, is retiring as special representative for North Korea policy and deputy assistant secretary for Korea and Japan after more than three decades of service.


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Ambassador Joseph Yun, Special Representative for North Korea policy and Deputy Assistant Secretary for Korea and Japan leave the State Departmant after more than three decades of service. He served  as US Ambassador to Malaysia with distinction.


His departure reflects the widespread frustration within the State Department at diplomats’ relative lack of power in the Trump administration, according to someone familiar with Yun’s thinking. It will leave another gaping hole in the United States’ staffing on Korean issues.

Washington has still not nominated an ambassador to South Korea, 13 months into the Trump administration. Victor Cha, an academic who served in the George W. Bush administration, had been in the running for the job, but the administration abruptly scrapped his candidacy last month.

Yun confirmed that he would be retiring and that Friday would be his last day. “This is my own personal decision,” Yun told The Washington Post.

“Secretary Tillerson has told me he appreciates my service and did not want me to go, but he accepts it reluctantly.”

Yun was the main person in the State Department dealing with the North Korea problem, and travelled to Seoul and Tokyo frequently to coordinate with the US allies.

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The late University of Virginia student  Otto Warmbier

He also travelled to Pyongyang last June to collect Otto Warmbier, the University of Virginia student who had been detained in North Korea for 17 months, almost all of them in a coma.

Yun brought Warmbier back to the United States on a medical evacuation flight. The 22-year-old died six days later.

During that trip to Pyongyang, Yun was able to see the three other Americans being detained in North Korea. That was the last time the three men have been seen or heard from.

Yun, a strong advocate of engagement with North Korea, has been arguing in favour of dialogue with Pyongyang during the last year of increased tensions.

He has been the US government’s main interlocutor with North Korea’s diplomats assigned to the United Nations, the working-level hotline called “the New York channel.” Yun has been regularly meeting with his counterpart there, Pak Song Il.

Last May (2017), he met in Oslo with the head of the Americas division in North Korea’s foreign ministry, Choe Son Hui, to arrange for Warmbier’s release. Choe is thought to have a direct line to the North Korean leader, Kim Jong Un.

Still, his efforts to promote dialogue with North Korea have been stymied by a president who has threatened to rain “fire and fury” down on the North Korean leader, who Trump has derided as “little rocket man.”

At the Olympic Games in South Korea, which closed on Sunday, South Korean President Moon Jae In has been trying to promote dialogue, eliciting a sign from North Korea’s representatives that they are willing to talk to the Trump administration.

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Secretary John Kerry was greeted by US Ambassador to Malaysia Joseph Yun during his first trip to Malaysia. Image: Flickr user U.S. Department of State

But the signals have been mixed, to say the least. The White House reported that Vice President Mike Pence was prepared to meet with North Korean officials during the Olympics opening ceremony but that they backed down at the last moment. The administration has kept up its drumbeat of “maximum pressure” on Pyongyang.

North Korea’s chief delegate to the closing ceremony, Kim Yong Chol, had indicated a renewed willingness for talks, Moon said, although it remains unclear whether denuclearisation would be on the agenda.

Yun’s departure comes as many foreign service officers have expressed frustration with the Trump administration’s unwillingness to listen to the State Department.

The top career diplomat in the State Department, Undersecretary of State for Political Affairs Tom Shannon, earlier this month (Feb) announced he would be retiring after 35 years in the Foreign Service.

Yun, who was born in South Korea but is a naturalised American citizen, joined the State Department in 1985. He served as head of the political division in the US Embassy in Seoul during in the early 2000s, including when Roh Moo Hyun was president and his chief of staff was Moon Jae In, the current president.

It was Yun who wrote the now-famous diplomatic cable describing Choi Tae Min, the spiritual adviser to disgraced South Korean President Park Geun Hye, as a “Korea Rasputin.” Between 2013 and 2016, during the Obama administration, Yun served as US Ambassador to Malaysia.

Living in a Time of Deception: Look Back on Malayan History


February 26, 2018

Living in a Time of Deception: Look Back on Malayan History

by Maryam Lee

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COMMENT | “So colonialism is about how brown people suffered and died for the ambitions of white men?”

I asked him. Dr Poh Soo Kai replied, “Not necessarily, it’s not about the skin colour, you see. The Japanese were not white, they also colonised us.”

Colonialism is an attitude, it is a way of thinking. It is the imperial mentality that people under imperialism deserve to be subjugated simply because they are not born of the “superior” race.

I spent a lot of time in early February listening to stories of transnational activism, before and after the Japanese occupation in South-east Asia, from the man himself, Dr Poh Soo Kai. Socialist activist, political prisoner, now the author of “Singapore: Living in a Time of Deception”.

His book has been translated to Indonesian by one of the local publishers, Ultimus, and the launching of the book was done in one of my favourite cities of culture and activism, Yogyakarta.

Poh shared many stories. When we went to the beach for lunch, Poh told stories of what Soekarno did to the communists in Indonesia (Madium 1948), and how the communists supported Soekarno anyway, when he nationalised Indonesian assets to piss off the Dutch.

And then stories of Malayan communists. Led by Loi Teck, who was a Vietnamese, the communists brokered an agreement with the British in return for recognition of the Malayan Communist Party in the new parliamentary democracy Malaya was supposed to adopt upon independence.

When the British left, the Malayan communists had fought the Japanese to gain independence. When the war was over, there was a dilemma, whether or not to continue the fight, since the British came back to secure Malaya again.

The British made an agreement with Loi Teck, under which they recognised the MCP for a ceasefire of the arms struggle that would resist the British’s return.

Ahmad Boestamam and other members of the Persatuan Kebangsaan Melayu Malaya (PKMM), the anti-colonial party set up after the Japanese occupation, refused to lay down arms and wanted to continue the arms struggle for independence.

Unfortunately, PKMM could not fight without the communists. So when they laid down arms, as per Loi Teck’s instructions, the left had no choice but to discontinue the arms struggle.

Shortly after surrendering their arms, Loi Teck disappeared with MCP’s money. They looked for him, but according to Chin Peng (on right in photo), the Thai communists found and killed him because he resisted arrest. It was later known that Loi Teck was a double agent that had double-crossed his own comrades for his own personal gains.

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British needed the distraction

Why the British had been so “nice” to the communists in Malaya was because they had to hold down the ports in Indonesia for the Dutch. The British Indian Army was sent all over Indonesia where there were uprisings, largely to Surabaya and Bandung, before the Dutch were strong enough to come back.

In the meantime, the British, who were not strong enough to fight the Malayan communists, had to convince MCP to lay down arms, via Loi Teck. The British needed this distraction so that Malayan communists could not succeed in gaining independence for Malaya, and for the British troops to come back from Indonesia.

When the war was over, the Dutch got hold of Indonesia, British troops were called back to suppress Malaya, and that was when all unions and left-wing organisations were banned and many of their leaders killed.

The promises the British made to MCP via Loi Teck to recognise the communists never materialised. As a matter of fact, with the newfound strength of the British army, they defeated the communists into exile.

“You see, Maryam, the cruel thing about colonialism is how brown people kill other brown people for those with pale skin and blue eyes,” Juliet said. Juliet is also a friend who had accompanied us in Yogyakarta.

“They made us fight each other, kill each other, and not even for the benefit of our own countries, but for the benefit of the imperialist countries,” her interjection served as a reminder of the unnecessary evils of colonialism, from which we only broke free not too long ago.

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Some of the people who lived through British and Japanese occupations in Malaya are still living. And they tell their stories in their memoirs to be compared to the “official” history written by those who had won, at least on the side of history.

Colonialism may be a recent past, but unfortunately, it lives as a distant memory. Poh’s stories must continue to be told and recorded to do justice to our post-colonial discourse. For historians, or those who record history, have the power to tell truth to power in a time full of deception.

MARYAM LEE is a writer with a chronic tendency to get into trouble. What she lacks in spelling when writing in English is made up for with her many writings in Bahasa Malaysia. She believes in conversations as the most valuable yet underrated cause of social change. She wants people to recognise silences and give them a voice, as she tries to bring people together through words.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

BOOK REVIEW: A ‘Vulcan’s’ Version of Asia-Pacific History

February 11, 2018

BOOK REVIEW: A ‘Vulcan’s’ Version of Asia-Pacific History

by John

Prosecuting an adequate foreign policy in Asia for the United States “requires mastering a strategic concept at least as complex as three-dimensional chess,” according to Michael J Green, who served on the National Security Council staff as a special adviser to George W Bush.

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“To use that analogy, on the top of the board, the United States must seek to reinforce a rules-based regional order underpinned by US leadership and backed by strong alliances, partnerships, trade agreements and multilateral engagement. On the middle board, the US will have to work toward a stable and productive relationship with China, constantly seeking new areas of cooperation based on a recognition of how much China can potentially contribute to global progress and prosperity. On the bottom board, the United States will have to continue ensuring that it has the military capabilities and posture necessary to defeat any attempts to overturn the current regional order through force.”

Think about the implications of that paragraph in connection with the government installed by President Donald Trump on January 20, 2016, and the astonishing damage the administration has done to the US position in Asia. The United States, Green writes, emerged as the preeminent power in the Pacific “not by providence alone but through the effective (if not always efficient) application of military, diplomatic, economic and ideational tools of national power to the problems of Asia.”  That 200-year campaign is now clearly over.

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The 45th POTUS is messing up US engagement with Asia– His All Options on the Table with North Korea Policy is creating tensions in Asia

Green, now a Senior Vice President for Asia at the Center for Strategic and International Studies in Washington, DC as well as a member of the School of Foreign Service of Georgetown University, has written the most deeply-researched, cogent and important book I have ever read on the US experience in the Asia Pacific, “By More than Providence: Grand Strategy and American Power in the Asia Pacific since 1783,” published in mid-2017. It is also badly flawed and has to be read in recognition that Green was a Vulcan, a member of the foreign policy team that advised Bush prior to his election in 2000.

Containing 174 pages of notes, bibliography and index in its 723 pages, it is arguably the most exhaustive history of the US presence in Asia going back to the founding of the Republic with the landing in what was then Canton of the clipper ship Empress of China at the Whampoa dock.

Image result for Michael J. Green By More than Providence: Grand Strategy and American Power in the Asia Pacific since 1783,”
It is the most deeply-researched, cogent and important book I have ever read on the US experience in the Asia Pacific–John Berthelsen

The book is an invaluable resource, a history of President-by-President Asia policy from George Washington to through Barack Obama drawn from hundreds of official sources and Green’s own experience. After the chapter on the administration of Gerald Ford, it needs to be read extremely carefully and critically. Although Green served as an adviser in the Clinton administration and as a member of the NSC under Bush the younger, it is clear where his heart is.

Even before that there are some significant elisions. The 1965 Gulf of Tonkin resolution is dealt with in a single sentence without mention of the fact that the linchpin for the resolution was a supposed attack on the US destroyers Maddox and Turner Joy by North Vietnam patrol boats during the administration of Lyndon B. Johnson. But the fact is that no such attack ever took place. The justification for US entry to a tragic war that took perhaps a million Vietnamese lives and 57,000 American ones was built on a lie.

There are other shortcomings. President Clinton’s decision to send two aircraft carrier battle groups to intercede in Chinese rocket rattling against the Strait of Taiwan gets short shrift although many analysts regarded it as a courageous strategic move.  Barack Obama is accused of waffling – which he did – although Edward Luce, in his new book “The Retreat of Western Liberalism” gives Obama rather higher marks.

George Schultz and Henry Kissinger

Ronald Reagan’s Secretary of State George Schultz is called “the most effective Secretary of State for Asia-Pacific policy in the history of the republic, which be news to Thomas Jefferson, John Quincy Adams, James Monroe, Edward Stettinius, James F Byrnes and others.

While he gives George H W Bush his due – a far more effective President than most give him credit for – Green far overplays Bush the younger, whose administration “came into office with a clear strategic concept on Asia focused on shaping a favorable geopolitical equilibrium in the region, and that generally held through a series of short-term crises and the attacks of 9/11.” He gives only passing reference to the infamous Bush Doctrine, which included not only unilaterally withdrawing from the ABM treaty, rejecting the Kyoto protocol, and a willingness to start preemptive wars, which meant that Asia cannot be considered separately from a long series of international disasters that reduced global approbation of US foreign policy.

His declaration of a “war on terror” included “rendition” of those suspected of terrorist activities to black site where they were tortured unmercifully.  The Bush administration also split its forces between Afghanistan and Iraq, fighting neither war very well. As a result, both countries ended up in a botch. In the wake of 9/11, when the world needed effective law enforcement and intelligence-gathering instead of the blunderbuss of twin invasions, Bush ridiculed John Kerry, his opponent in his second presidential race, as “fundamentally misunderstanding the war on terror.” The fact is that Kerry understood it a lot better than Bush did, to America’s deep misfortune.

Having said all that, the value in Green’s book is its deep wealth of detail about how successive governments – even the Bush 43 one – have conducted enormously layered foreign policies, not just in the Asia Pacific but across the world.  For those interested in foreign policy, it is a must read, especially given the tragedy that is being visited on US strategic interests by the current administration.

Trump, as Luce points out, “has chosen to drive America’s regional allies into China’s arms. Even Australia, which comes closest to US values, wants to enter China’s rival trade group, the Regional Comprehensive Economic Partnership.”  He voided the Transpacific Partnership, arguably over pique at Obama. At a time when a rising China is setting out to return to the global pre-eminence it enjoyed up to the 17th Century, throwing its weight around in East Asia, enormously skilled diplomacy is called for. Instead, Trump has decimated the State Department, appointed an oil man with no government experience as Secretary of State – and won’t listen to him even when he tries to talk sense into him.

Image result for john berthelsen asia sentinelJohn Berthelsen

The current President is not a man for three-dimensional chess. He is not a man for chess at all. As Luce points out – and Green probably would if he could add a chapter – the US has entered arguably the most dangerous period in the country’s history when it comes to Asian policy, if not global diplomacy overall.


Post-Davos Depression

February 4, 2018

Post-Davos Depression

by Dr. Joseph E. Stiglitz@www.project-syndicate. org

The CEOs of Davos were euphoric this year about the return to growth, strong profits, and soaring executive compensation. Economists reminded them that this growth is not sustainable, and has never been inclusive; but in a world where greed is always good, such arguments have little impact

..,the lessons of history are clear. Trickle-down economics doesn’t work. And one of the key reasons why our environment is in such a precarious condition is that corporations have not, on their own, lived up to their social responsibilities. Without effective regulations and a real price to pay for polluting, there is no reason whatsoever to believe that they will behave differently than they have..–Joseph E. Stigltz

DAVOS – I’ve been attending the World Economic Forum’s annual conference in Davos, Switzerland – where the so-called global elite convenes to discuss the world’s problems – since 1995. Never have I come away more dispirited than I have this year.

Image result for The Economic Elites at Davos 2018Demonstrators in Zurich this week. While many are poised to recoil at President Trump’s arrival in Davos this week, much of the moneyed elite there are willing to overlook what they portray as the president’s rhetorical foibles in favor of the additional wealth he has delivered to their coffers. Credit Ennio Leanza/European Pressphoto Agency.


The world is plagued by almost intractable problems. Inequality is surging, especially in the advanced economies. The digital revolution, despite its potential, also carries serious risks for privacy, security, jobs, and democracy – challenges that are compounded by the rising monopoly power of a few American and Chinese data giants, including Facebook and Google. Climate change amounts to an existential threat to the entire global economy as we know it.

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Perhaps more disheartening than such problems, however, are the responses. To be sure, here at Davos, CEOs from around the world begin most of their speeches by affirming the importance of values. Their activities, they proclaim, are aimed not just at maximizing profits for shareholders, but also at creating a better future for their workers, the communities in which they work, and the world more generally. They may even pay lip service to the risks posed by climate change and inequality.

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But, by the end of their speeches this year, any remaining illusion about the values motivating Davos CEOs was shattered. The risk that these CEOs seemed most concerned about is the populist backlash against the kind of globalization that they have shaped – and from which they have benefited immensely.

Not surprisingly, these economic elites barely grasp the extent to which this system has failed large swaths of the population in Europe and the United States, leaving most households’ real incomes stagnant and causing labor’s share of income to decline substantially. In the US, life expectancy has declined for the second year in a row; among those with only a high school education, the decline has been underway for much longer.

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Justin Trudeau of Canada and Narendra Modi of India–The Globaists at Davos 2018 who together with Germany’s Angela Merkel, Emmanuel Macton of France and China’s Xi Jinping will make America First’s Donald Trump irrelevant.

Not one of the US CEOs whose speech I heard (or heard about) mentioned the bigotry, misogyny, or racism of US President Donald Trump, who was present at the event. Not one mentioned the relentless stream of ignorant statements, outright lies, and impetuous actions that have eroded the standing of the US president – and thus of the US – in the world. None mentioned the abandonment of systems for ascertaining truth, and of truth itself.

Indeed, none of America’s corporate titans mentioned the administration’s reductions in funding for science, so important for strengthening the US economy’s comparative advantage and supporting gains in Americans’ standard of living. None mentioned the Trump administration’s rejection of international institutions, either, or the attacks on the domestic media and judiciary – which amounts to an assault on the system of checks and balances that underpins US democracy.

No, the CEOs at Davos were licking their lips at the tax legislation that Trump and congressional Republicans recently pushed through, which will deliver hundreds of billions of dollars to large corporations and the wealthy people who own and run them – people like Trump himself. They are unperturbed by the fact that the same legislation will, when it is fully implemented, lead to an increase in taxes for the majority of the middle class – a group whose fortunes have been in decline for the last 30 years or so.

Even in their narrowly materialistic world, where growth matters above all else, the Trump tax legislation should not be celebrated. After all, it lowers taxes on real-estate speculation – an activity that has produced sustainable prosperity nowhere, but has contributed to rising inequality everywhere.

The legislation also imposes a tax on universities like Harvard and Princeton – sources of numerous important ideas and innovations – and will lead to lower local-level public expenditure in parts of the country that have thrived, precisely because they have made public investments in education and infrastructure. The Trump administration is clearly willing to ignore the obvious fact that, in the twenty-first century, success actually demands more investment in education

For the CEOs of Davos, it seems that tax cuts for the rich and their corporations, along with deregulation, is the answer to every country’s problems. Trickle-down economics, they claim, will ensure that, ultimately, the entire population benefits economically. And the CEOs’ good hearts are apparently all that is needed to ensure that the environment is protected, even without relevant regulations.

Yet the lessons of history are clear. Trickle-down economics doesn’t work. And one of the key reasons why our environment is in such a precarious condition is that corporations have not, on their own, lived up to their social responsibilities. Without effective regulations and a real price to pay for polluting, there is no reason whatsoever to believe that they will behave differently than they have.

The Davos CEOs were euphoric about the return to growth, about their soaring profits and compensation. Economists reminded them that this growth is not sustainable, and has never been inclusive. But such arguments have little impact in a world where materialism is king.

So forget the platitudes about values that CEOs recite in the opening paragraphs of their speeches. They may lack the candor of Michael Douglas’s character in the 1987 movie Wall Street, but the message hasn’t changed: “Greed is good.” What depresses me is that, though the message is obviously false, so many in power believe it to be true.